The Hindu: Published on 12th June 2025:
Why in News?
The European Court of Justice (ECJ) recently struck down Malta’s controversial ‘golden passports’ scheme, declaring it incompatible with European Union (EU) law. The verdict comes after the European Commission initiated infringement proceedings, arguing that the scheme commodified EU citizenship.
Background:
Malta launched its Citizenship by Investment (CBI) scheme in 2020, offering citizenship to foreign nationals in exchange for large financial investments.
While the EU allows individual member states to decide on citizenship, it opposes the monetization of EU citizenship due to the broader rights and responsibilities that come with it (e.g., free movement, voting).
This form of economic migration had already raised alarms regarding security risks, money laundering, tax evasion, and organized crime.
Other EU countries like Cyprus and Bulgaria have faced similar criticism over their CBI/RBI programs.
Key Concepts: CBI and RBI:
Citizenship by Investment (CBI) = “Golden Passport”: Citizenship in exchange for financial investment.
Residency by Investment (RBI) = “Golden Visa”: Residency rights granted similarly.
Between 2013–2019, about 1.32 lakh individuals entered the EU via these programs, generating over €20 billion.
EU's Objections:
Violation of EU Values: Citizenship granted purely for money undermines the principle of EU citizenship as established in the 1992 Maastricht Treaty and 2009 Lisbon Treaty.
Security and Ethical Concerns: These schemes are viewed as potential gateways for illicit money, leading to corruption and lack of accountability.
Commodification of Citizenship: Citizenship, according to EU institutions, is based on genuine ties, shared values, and civic duties, not market transactions.
“European Values Are Not For Sale” – Ursula von der Leyen (2020).
ECJ Verdict (April 2025):
The ECJ ruled that Malta’s 2020 CBI scheme violates the trust-based framework of EU citizenship.
Granting citizenship without any real link between the applicant and the country was seen as undermining mutual trust among EU member states.
The court emphasized solidarity, good faith, and reciprocity of duties as essential for granting nationality.
Impact & What’s Next:
Malta may still issue national citizenships, but excluding EU citizenship rights — which diminishes the program’s appeal.
Other EU nations with similar schemes may face stricter scrutiny or legal action.
The ruling strengthens the EU’s stance against the commodification of citizenship and sets a legal precedent.
It may also lead to tighter integration of citizenship standards across the bloc.
Broader Implications:
- Raises questions about the ethics of market-driven migration.
- Encourages debate on national sovereignty vs. supranational values within the EU.
- Reinforces that EU citizenship is not a transactional commodity, but a shared identity rooted in democratic principles.
